WHAT RETAIL APOCALYPSE?
As it's grown from a humble online bookseller into a retail behemoth, Amazon has threatened major companies and entire industries. But there are certain companies that have actually been created or significantly benefited because of Amazon, while others are standing strong in the face of the Seattle-based giant. Here are 11 businesses that are not just surviving but thriving in the Amazon era.
Even the largest retailer in the world would be nothing if it couldn't get its products to customers. For that, Amazon has relied heavily on FedEx, UPS, and DHL Express, along with the U.S. Postal Service. It also partners with local courier companies such as A1 International Courier in New Jersey, New York, Michigan, and Pennsylvania, and OnTrac in the Western United States.
PACKAGE DELIVERY ENTREPRENEURS
Amazon is helping small-business owners start delivery companies — provided they are willing to deliver Amazon packages. Dave Clark, Amazon's senior vice president of worldwide operations, said in a statement, "We are going to empower new, small businesses to form in order to take advantage of the growing opportunity in e-commerce package delivery." As part of the program, Amazon says the new businesses can have up to 40 new vehicles and bring in up to $300,000; startup costs can be as low as $10,000.
CARDBOARD BOX MAKERS
Amazon ships an estimated 1.6 million packages per day. That's a load of cardboard, and some of the biggest corrugated packaging companies supplying it are Atlanta's WestRock, Illinois-based Packaging Corp., and Sonoco Products, headquartered in South Carolina.
As more orders are being fulfilled, Amazon needs more fulfillment centers. A new 850,000-square-foot center near Grand Rapids, Michigan, is set to break ground in September. That's a windfall for St. Louis-based Ben Hur Construction and Detroit-based Ideal Contracting, which are Amazon's partners in this $150 million venture, the retailer's fourth warehouse in Michigan. Florida, New Jersey, Texas, and California construction companies are seizing similar opportunities.
STEEL AND CONCRETE SUPPLIERS
Building-supply companies also are benefiting as Amazon continues to expand its facilities. SunSteel of Vancouver, Washington, provided 8,000 tons of steel for a fulfillment center outside Seattle — more than it took to build the Eiffel Tower. Companies like U.S. Steel also have supplied materials for such projects.
CREDIT CARD COMPANIES
Credit card companies collect a fee from the merchant for every transaction. It's not large, but given that Amazon posted nearly $178 billion in revenue last year, it adds up. When you use a credit card to purchase something on Amazon, the lion's share of the fee goes to the bank that issued the card (say, Chase or Capital One) and another bit goes to the credit card network associated with the account (Visa or Mastercard). Some companies (American Express and Discover) take on the role of a bank, as well.
Amazon has big plans for its voice-enabled Echo devices, which feature the Alexa virtual assistant, and it's been putting its money where its mouth is, so to speak. The online retailer launched the Alexa Fund with $100 million in 2015 to promote and invest in companies that incorporate the Alexa platform into their offerings. The company upped its commitment with another $100 million last year.
DISCOUNT RETAIL CHAINS
As major chains close bricks-and-mortar stores in the face of competition from Amazon and other e-tailers, TJX, the parent company of T.J. Maxx, Marshalls, and HomeGoods, is opening 238 stores this year. Ross Stores and Burlington are also growing. These so-called off-price retailers buy up inventory when clothing companies produce too many items or department stores cancel orders and sell the merchandise at a discount. They continually rotate a variety of styles and offer a bargain-hunting experience that Amazon can't replicate.
PR AND MARKETING FIRMS
Amazon has kicked off a scramble among U.S. municipalities by announcing plans to create a second headquarters that could bring some 50,000 jobs to one lucky locale. To lure the retail giant, cities such as Birmingham, Alabama, have tapped local public relations and marketing firms like Big Communications to promote their areas. Birmingham managed to score an Amazon fulfillment center in the process.